KNR Constructions Limited , Hyderabad V. Dy. Commissioner of Income Tax , Central Circle-2(1), Hyderabad

ITA 2029/Hyd/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 6890 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 22-03-2021
• Assessment Year: 2003-2004
• Appeal Filed On: 10-10-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: KIRAN MANOHAR S RAMA RAO
• Section: 154

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD (THROUGH VIRTUAL HEARING) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NOS. 2028 AND 2029/HYD/2018 A.Y. 2001 - 02 AND 2003 - 04 KNR CONTRACTORS LIMITED, HYDERABAD. PAN: AAACK 8316 L VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 2(1), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI KIRAN MANOHAR FOR S. RAMA RAO REVENUE BY: SHRI ROHIT MUJUMDAR, DR DATE OF HEARING: 22/03/2021 DATE OF PRONOUNCEMENT: 07 /04/2021 ORDER PER A. MOHAN ALANKAMONY, AM.: THESE APPEALS ARE FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT (A) - 12, HYDERABAD IN APPEAL NOS.10055 AND 10056/2017 - 18, DATED 20/07/2018 PASSED U/S. 154 R.W.S 250(6) OF THE ACT FOR THE AYS 2001 - 02 AND 2003 - 04. 2. THE ASSESSEE HAS RAISED NINE GROUNDS OF APPEAL FOR THE A.Y. 2001 - 02 AND THEY ARE EXTRACTED HEREIN BELOW FOR REFERENCE: 1. ON THE FACTS AND IN LAW AND IN THE CIRCUMSTANCE S OF THE CASE, THE ORDER OF THE CIT(A) IS ERRONEOUS AND UNJUST. 2 2. THE CIT(A) ERRED IN DISMISSING THE FOLLOWING GROUNDS OF APPEAL OF THE ASSESSEE EX - PARTY, WITHOUT HEARING ON THE GROUNDS OF APPEAL FROM THE ASSESSEE AND WITHOUT CONSIDERING THE FACT THAT, AD JOURNMENT LETTERS WERE FURNISHED ON EARLIER OCCASIONS FOR VALID REASONS AND WHEN ONLY ONCE THE ADJOURNMENT LETTER WAS NOT FILED DUE TO UNAVOIDABLE CIRCUMSTANCES. 3. ON THE FACTS AND IN LAW, THE ORDER OF THE A.O. REJECTING THE LETTER OF THE ASSESSEE FOR REC TIFICATION U/S. 154 IS ERRONEOUS AND UNJUST AND CONTRARY TO THE FACTS AND CIRCUMSTANCES. 4. THE A.O. OUGHT TO HAVE ESTIMATED 12.5% ON MAIN WORKS OF RS. 11,90,68,505/ - AND 8% ON SUB - CONTRACT WORKS OF RS. 21,09,35,829/ - AS PER THE ORDER OF THE HONBLE ITAT. 5. THE A.O. OUGHT TO HAVE RETAINED THE 5% OF THE PROFIT RATE ON WORKS GIVEN ON SUB CONTRACT TO OTHERS BY THE ASSESSEE AS PER THE DIRECTION OF THE LD. CIT(A), AS THIS POINT WAS NOT DEALT BY THE ITAT. 6. THE A.O. OUGHT TO HAVE UNDERSTAND THAT WHEN A PARTIAL RELIEF WAS IN THE HONBLE TRIBUNAL ORDER, NO FURTHER ENHANCEMENT CAN BE MADE TO THE ASSESSED INCOME. 7. THE A.O. OUGHT TO HAVE C ONSIDERED OUR LET T ER FOR RECTIFICATION U/S. 154 AND PASSED ON THE PARTIAL RELIEF GRANTED BY THE ITAT TO THE ASSESSEE AND THEREBY REDUCE THE ASSESSED INCOME U/S. 143(3), LESS THAN TO RS. 2,56,25,810/ - . 8. THE A.O. OUGHT TO HAVE CONSIDER THAT, THE CIT(A) CAN ONLY ENHANCE THE ASSESSED INCOME IN APPEAL, BUT NOT IN THE HONBLE ITAT WITHOUT SETTING ASIDE THE ORDER OF THE A.O. AND DIRECTION TO REASSESS THE INCOME OF THE ASSESSEE. 9. THE A.O. OUGHT TO HAVE TAKEN INTO CONSIDERATION THAT THE BENEFIT ONCE GIVEN TO THE ASSESSEE CANNOT BE TAKEN BACK BY MISINTERPRETATION OF THE ORDER OF THE ITAT. 3. THE ASSESSEE HAS RAISED NINE GROUNDS O F APPEAL FOR THE A.Y. 2003 - 04 AND THEY ARE EXTRACTED HEREIN BELOW FOR REFERENCE: 1. ON THE FACTS AND IN LAW AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER OF THE CIT(A) IS ERRONEOUS AND UNJUST. 2. THE CIT(A) ERRED IN DISMISSING THE FOLLOWING GROUNDS OF AP PEAL OF THE ASSESSEE EX - PARTY, WITHOUT HEARING ON THE GROUNDS OF APPEAL FROM THE ASSESSEE AND WITHOUT CONSIDERING THE FACT THAT, ADJOURNMENT LETTERS WERE FURNISHED ON EARLIER OCCASIONS FOR VALID REASONS AND WHEN ONLY ONCE THE ADJOURNMENT LETTER WAS NOT FIL ED DUE TO UNAVOIDABLE CIRCUMSTANCES. 3. ON THE FACTS AND IN LAW, THE ORDER OF THE A.O. REJECTING THE LETTER OF THE ASSESSEE FOR RECTIFICATION U/S. 154 IS ERRONEOUS AND UNJUST AND CONTRARY TO THE FACTS AND CIRCUMSTANCES. 4. THE A.O. ERRED IN ENHANCING / CON FIRMING THE ENHANCED ASSESSED INCOME FROM RS. 5,68,44,750/ - TO 7,36,94,250/ - BY MISINTERPRETATION OF THE 3 ORDER OF THE HONBLE ITAT GIVING PARTIAL RELIEF FOR THE ASSESSED INCOME ON ESTIMATION BASIS U/S. 143(3). 5. THE A.O. OUGHT TO HAVE RETAINED THE 12.5 % O N OWN WORKS EXECUTED ON OWN AND 8% ON WORKS TAKEN ON SUB CONTRACT AND EXECUTED ON OWN WHERE NO PERCENTAGE OF PROFIT FOREGONE TO THE MAIN CONTRACTOR WAS NOT MENTIONED IN THE AGREEMENT OF SUB - CONTRACT. 6. THE A.O. OUGHT TO HAVE UNDERSTAND THAT WHEN A PARTIAL RELIEF WAS IN THE HONBLE TRIBUNAL ORDER, NO FURTHER ENHANCEMENT CAN BE MADE TO THE ASSESSED INCOME. 7. THE A.O. OUGHT TO HAVE CONSIDERED OUR LETER FOR RECTIFICATION U/S. 154 AND PASSED ON THE PARTIAL RELIEF GRANTED BY THE ITAT TO THE ASSESSEE AND THEREBY REDUCE THE ASSESSED INCOME U/S. 143(3), LESS THAN TO RS. 5,68,44,750 / - . 8. THE A.O. OUGHT TO HAVE CONSIDER THAT, THE CIT(A) CAN ONLY ENHANCE THE ASSESSED INCOME IN APPEAL, BUT NOT IN THE HONBLE ITAT WITHOUT SETTING ASIDE THE ORDER OF THE A.O. AND DIRECTI ON TO REASSESS THE INCOME OF THE ASSESSEE. 9. THE A.O. OUGHT TO HAVE TAKEN INTO CONSIDERATION THAT THE BENEFIT ONCE GIVEN TO THE ASSESSEE CANNOT BE TAKEN BACK BY MISINTERPRETATION OF THE ORDER OF THE ITAT. 4 . AT THE OUTSET, THE LD. AR SUBMITTED BEFORE US THAT THE LD. CIT(A) HAD PASSED EX - PARTE ORDERS FOR THE AYS 2001 - 02 AND 2 003 - 04 WITHOUT PROVIDING PROPER OPPORTUNITY TO THE ASSESSEE OF BEING HE ARD. IT WAS THEREFORE PLEADED THAT THE ASSESSEE MAY BE PROVIDED WITH ONE MORE OPPORTUNITY TO PURSUE ITS CASE S BEFORE THE LD. CIT(A) . LD. DR ON THE OTHER HAND OBJECTED TO THE SUBMISSIONS OF THE LD. AR AND ARGUED THAT SUFFICIENT OPPORTUNITIES HAD BEEN PROVIDED TO THE ASSESSEE, HOWEVER, ON THE GIVEN DATES OF HEARING, NEITHER THE ASSESSEE NOR ITS REPRESENTATIV E APPEARED BEFORE THE LD. CIT (A). LD. DR FURTHER SUBMITTED THAT EVEN BEFORE THE LD. A.O. THOUGH THE ASSESSEE GOT SUFFICIENT OPPORTUNITY TO SUBSTANTIATE ITS CASE, THE ASSESSEE FAILED TO SUBSTANTIATE ITS CLAIM WITH COGENT EVIDENCE . UNDER THESE CIRCUMSTANCE S, THE LD. CIT (A) HAD NO 4 OTHER OPTION BUT TO PASS EX - PARTE ORDER S FOR THE AYS 2001 - 02 AND 2003 - 04 BASED ON THE MATERIALS AVAILABLE ON RECORD. HENCE, IT WAS PLEADED THAT THE ORDERS PASSED BY THE LD. REVENUE AUTHORITIES DO NOT CALL FOR ANY INTERFERENCE AND APPEAL S OF THE ASSESSEE MAY BE DISMISSED. 5 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. ON EXAMINING THE FACTS OF THE CASE, WE FIND MERIT IN THE SUBMISSIONS OF THE LD. DR. THE LD. CIT (A) HAD POSTED THE CASE ON S EVERAL OCCASIONS. HOWEVER, NONE APPEARED ON BEHALF OF THE ASSESSEE BEFORE THE LD. CIT(A) ON THE GIVEN DATES OF HEARING. HENCE, THE LD. CIT(A) LEFT WITH NO OTHER OPTION EXCEPT TO PASS EX - PARTE ORDER S BASED ON THE MATERIAL AVAILABLE ON RECORD. IN THIS SITUA TION, WE DO NOT FIND MUCH STRENGTH IN THE ARGUMENTS ADVANCED BY THE LD. AR. HOWEVER , CONSIDERING THE PRAYER AND THE SUBMISSIONS OF THE LD. AR AND THE NATURE OF ISSUES INVOLVED IN THE APPEAL S , IN THE INTEREST OF JUSTICE, WE HEREBY REMIT THE MATTER BACK TO T HE FILE OF LD. AO FOR DE - NOVO CONSIDERATION THEREBY PROVIDING ONE MORE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. AT THE SAME BREATH, WE ALSO HEREBY CAUTION THE ASSESSEE TO PROMPTLY CO - OPERATE BEFORE THE LD. CIT(A) IN THE PROCEEDINGS FAILING WHICH THE LD. CIT(A) SHALL BE AT LIBERTY TO PASS APPROPRIATE ORDERS IN ACCORDANCE WITH LAW AND MERITS BASED ON THE MATERIALS ON THE RECORD. IT IS ORDERED ACCORDINGLY. 5 6 . IN THE RESULT, THE TWO APPEAL S FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES AS INDI CATED HEREINABOVE. PRONOUNCED IN THE OPEN COURT ON THE 07 TH APRIL, 2021. SD/ - SD/ - (SMT. P. MADHAVI DEVI) ( A. MOHAN ALANKAMONY ) (JUDICIAL MEMBER) ACCOUNTANT MEMBER HYDERABAD, DATED: 07 TH APRIL, 2021. OKK COPY TO: - 1) KNR CONTRACTORS LIMITED, KNR HOUSE, PHASE - 1, PLOT NO.114, 3 RD AND 4 TH FLOOR, KAVURI HILLS, HYDERABAD. 2) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 2(1), HYDERABAD. 3) THE CIT(A) - 1 2, HYDERABAD. 4) THE PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) , HYDERABAD. 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE